Federal Circuit Review - December 2022

| Irfan LateefDaniel Kiang

December 2022 Federal Circuit Newsletter (Japanese)

December 2022 Federal Circuit Newsletter (Chinese)

Collateral Estoppel Is Applicable in IPRs When the Question of Patentability Is the Same

In Google LLC v. Hammond Development International, Inc. Appeal No. 21-2218, the Federal Circuit held that Google filed an IPR on Hammond’s ’816 patent, which related to and shared a specification with Hammond’s ’483 patent. The PTAB determined that Google failed to meet its burden to show that Claim 18 of the ’816 patent was unpatentable.

Google had successfully challenged Hammond’s ’483 patent in another IPR, including Claim 18 of that patent. The PTAB’s decision in the ’483 patent IPR became final during the pendency of the ’816 patent IPR. Claim 18 of the ’816 patent was identical to Claim 18 of the ’483 patent, except for “language describing the number of application servers.”

Google appealed the PTAB’s decision regarding the ’816 patent IPR, arguing that the PTAB’s determination that Claim 18 of the ’483 patent was unpatentable rendered Claim 18 of the ’816 patent unpatentable based on collateral estoppel.

The Federal Circuit agreed. The court reasoned that collateral estoppel had long applied to IPR proceedings and that patent claims need not be identical for collateral estoppel to apply. The court reasoned that collateral estoppel may apply even if the claim language in the two patents is different, so long as “the difference[s] between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity.” The court agreed with Google that Claim 18 of the ’816 patent and Claim 18 of ’483 patent presented identical issues of patentability, finding that the differences between the claims would have been obvious and therefore did not materially alter the patentability analysis. Accordingly, the court reversed the PTAB’s determination as to Claim 18 of the ’816 patent.

Claim Directed to Specific, Hardware-Based Data Structure That Enables Technological Improvement Is Patent-Eligible Under § 101

In Adasa Inc. v. Avery Dennison Corporation, Appeal No. 22-1092, the Federal Circuit held that a claim directed to a specific, hardware-based data structure that enables technological improvements is more than an abstract idea and is patent-eligible under 35 U.S.C § 101.

ADASA sued Avery Dennison for patent infringement in the District of Oregon. The district court granted summary judgment in favor of ADASA that the asserted claim was not ineligible under 35 U.S.C § 101 and was neither anticipated nor obvious. Following trial, the district court entered a financial sanction against Avery Dennison for discovery violations, including failing to disclose a number of infringing products until after the jury verdict. Avery Dennison appealed.

The Federal Circuit affirmed the district court’s holding that the asserted claim was directed to eligible subject matter under § 101. Avery Dennison argued that the claim, which recited a system for assigning a serial number to a RFID chip, was directed to the abstract idea of “assigning meaning to a subsection of a data field[.]” The Federal Circuit disagreed and found instead that, setting aside conventional hardware components, the claim is directed to a specific, hardware-based data structure designed to enable technological improvements, and not a mere mental process. The Federal Circuit relied in particular on the way the claimed system provided unique serial numbers.

The Federal Circuit reversed the district court’s grant of summary judgment of no anticipation or obviousness. In particular, the Court held that triable issues of fact existed despite linguistic differences between prior references and the claim. The Federal Circuit also upheld the award of financial sanctions against Avery Dennison, but remanded for reconsideration of the amount because the District Court awarded sanctions based on the total number of infringing products, rather than the number of infringing products that were untimely disclosed.

Evidence of Actual Physician Practice Is Relevant in Determination of Direct Infringement

In Genentech, Inc. v. Sandoz Inc. Appeal No. 22-1595, the Federal Circuit held that the district court did not clearly err in considering evidence of actual physician practice when determining whether a generic drug’s instructions encouraged, recommended, or promoted infringement.

Genentech brought a Hatch-Waxman suit against Sandoz for infringement of its patents directed to dose modification methods for managing side effects when using pirfenidone to treat idiopathic pulmonary fibrosis (IPF). The district court concluded that Genentech’s liver function test (LFT) patents were unpatentable as obvious and the sale of Sandoz’s generic product would not directly infringe Genentech’s drug-drug interaction (DDI) patents. Genentech appealed.

The Federal Circuit held that the district court properly found that the dose modifications claimed in the LFT patents would have been obvious over the prior art in view of well-known, standard medical practices. The district court’s analysis of the prior art properly relied on extensive record evidence including expert testimony and FDA guidance. The Federal Circuit also found Genentech’s evidence of objective indicia of nonobviousness unpersuasive since Genentech did not provide evidence showing skepticism or an unmet need for the claimed methods.

Regarding the DDI patents, the Federal Circuit held that the district court did not clearly err in weighing all relevant evidence, including Sandoz’s proposed label and physician practice. Genentech argued that there was no evidence to negate the language of the proposed label, which encourages, recommends, and promotes infringement. The Federal Circuit explained that evidence of actual physician practice suggested that Sandoz’s instructions would not result in direct infringement of the DDI patents. Thus, the Federal Circuit concluded that the district court “did not clearly err by considering physician evidence, weighing it against the language in Sandoz’s proposed label, and finding that Genentech failed to prove direct infringement.” Accordingly, the Federal Circuit affirmed the district court’s findings of obviousness and noninfringement.